One of the starkest differences I see between First Timers in SaaS and Second Timers is when they hire their VP of Marketing.
At BoxDev the other week (our post here), the contrast was especially vivid. Second-timer Shan Sinha, now CEO of Highfive hired his first head of marketing a year before first revenue. A year. (He was fortunate in that with a good exit on this first one, the VCs gave him a lot of runway for the next one). Contrast that with first time rockstar Sarah Nahm, CEO of Lever, who hired 10 sales reps before hiring her first head of marketing.
Those are two extremes in my experience. Most of us can’t afford to hire a VPM 12 months before we have our first customer, and we can’t survive through 10 sales reps without one.
What I can tell you both mathematically and qualitatively, is that you almost can’t hire a VP of Marketing too early. But it’s very, very easy to make the hire late. It’s not quite as terrible as waiting too long for a VP of Sales. But it’s still a big missed opportunity.
We did a session on this at the SaaStr Spring Soiree / Marketing Workshop last year with my VP of Sales and VP of Marketing you can watch here:
Let me boil it down a bit:
- A great VP of Marketing will manage your leads, however few you have, better through the funnel. Assuming you have any leads, really, and a deal size of any significant size (say $5-$10k ACV or above) … she or he can quickly pay for herself. Just by making sure more of those precious leads actually close. She’ll make sure they are at least programatically and predictably talked to, qualified, confirmed, and managed.
- A great VP of Marketing can help make the sales reps better qualitatively, even before you have a VP of Sales. If you haven’t built a sales team yourself (and most of us haven’t), your VPM can’t do it for you. But she can help. Any great VP of Marketing has worked with a great sales team or two. She can help you hire better reps, more quickly, with more success. She can also help them with collateral, with webinars, with air cover. She’s done it before and knows what works and what they need.
- A great VP of Marketing will help increase your revenue per lead. In the early days, Revenue Per Lead is critical. Because leads are so precious.
- And last and not remotely least, a great VP of Marketing will get you more leads. At least some, even in the earliest days, even with the tiniest of budgets. Just a few more good leads can make such a difference in the early days. A few more great logos, one more $50k or $100k ACV deal earlier.
And there are more benefits that this, of course. You’ll get help with product positioning, marketing, PR, and all that.
In fact, it’s really hard for a great VP of Marketing to not pay for herself once you have just 10 paying customers. More on why the great ones are accretive here.
The key then is two-fold: first, make the hire early. At least, no later than once you have 2 scaled sales reps. By then, you at least have a repeatable sales process, if not yet a repeating one. More on that here.
And second, don’t underhire. Please. Don’t. Underhire. The problem with just hiring a “marketing manager” or something like that is they rarely have enough experience to own a number, to own a lead commit. And if they can’t own a lead commit, if they can’t own an opportunity commit — then in fact they probably won’t be directly accretive. And so in fact, will be more expensive, all-in, that a more senior hire with a bigger salary.
Ok, ok, you say. I get it. But I can’t recruit a great VP/Head of Marketing until I’m Bigger. Maybe. But let me challenge you to just look harder. I agree, unless you just raised $20m in your Series Seed, the Super Hot, Obvious Candidate may not join your Non-Super Hot $40k MRR SaaS Start-up. The #2, #3, #,4, and #5 in marketing at Box may go to that Super Hot SaaS Start-up. In fact, they did. They went to Super-Funded Gainsight and Betterworks (and you can hear both of them speak at The SaaStr Annual ’16 on how they’re running the Box playbook a second time).
But, even in this super hot market, there are still two types of VP / Head of Marketing that don’t have 50+ recruiter calls a month. At least, not 50+ good ones. First, the ones from the less well known companies. In fact, you may do better hiring someone from Egynte or Hightail than Box. They have to work harder, with less resources, with tougher competition. Second, the Tweeners. They’ve been team leads, but haven’t quite gotten to the next level yet. Take a risk.
And sell yourself. VPs and Directors that join start-ups early are looking to be owners. Sell them on why you are really going places. Hustle. Spend 20% of your time recruiting no matter what.
Anyhow at least try. Try to hire your VP of Marketing, or at least a senior owner (Director+) as soon as you have just 2 sales reps. Any later is just at least a partial waste of time and opportunity.
If you can get to $1m and then $10m 10-20% faster … the long-term benefits can be profound in a recurring revenue model.
(Cross-posted @ SaaStr)